Wednesday, December 17, 2014

Tanzanian attorney general resigns over graft accusations

(Reuters) - Tanzania's attorney general resigned late on Tuesday, becoming the first political casualty in an energy corruption scandal in the east African country that has led Western donors to delay aid and weakened the currency.

The resignation followed a vote in parliament late last month calling on the government to dismiss senior officials, including Attorney General Frederick Werema, for their role in an energy deal that lawmakers say was fraudulent.

President Jakaya Kikwete has said he will respond later this week to parliament's resolution, which was binding.

Tanzania is estimated to have 53.2 trillion cubic feet (tcf) of gas reserves off its southern coast, but its energy sector has long been dogged by allegations of graft.

Lawmakers found that the officials, including the attorney general and the energy minister, fraudulently authorised the transfer of at least $122 million (£77.5 million) of public funds to a private company. The funds came from an escrow account held jointly by state power company TANESCO and independent power producer IPTL and went to IPTL's owner, Pan Africa Power (PAP) in 2013.

The government officials denied any impropriety in the transfer of the funds, and PAP said the transfer was legal.

In his resignation letter, Werema said he was stepping down "because his advice on the Tegeta escrow account issue had not been understood and had disrupted the country's political atmosphere," according to the president's statement.

A group of 12 international donors have said they will only pay outstanding pledges of budget support worth nearly $500 million to aid-reliant Tanzania if the investigation into the graft claims are published and appropriate action is taken.

The United States warned last week that its award of grants, under a program that rewards countries for good governance, would depend on the government's anti-graft effort.